Battling the Box 

IKEA and the future of East Bay retail

Sometimes it seems that all the cars in the East Bay are in the IKEA parking lot on any given Sunday afternoon. And those not already in the lot are lined up waiting for their chance to pour in. The line for the parking lot clogs up Shellmound Street, choking intersections and prompting bleats of fury from impatient drivers behind the wheels of U-Hauls and SUVs. They've come to buy, not idle. Since IKEA East Bay opened its doors in April 2000, tens of thousands of customers have spilled through its double doors and later staggered out, sated on Swedish meatballs, and laden with low-cost furniture.

The East Bay emporium is one of only twenty stores that IKEA operates in the United States. Covering nearly 300,000 square feet, and offering more than 9,000 different products at prices that only a bankruptcy sale could beat, IKEA would seem to represent a formidable challenge to the East Bay's smaller, costlier furniture stores. And coupled with the other "big box" retail stores that have taken up residence in the vicinity, it looks like Emeryville is offering the East Bay's retail community a run for its money.

Surprisingly, however, rather than quailing at the sight of IKEA's crowds, many of Berkeley's smaller furniture stores responded by banding together in an effort to save their businesses. And as the East Bay's older retail areas struggle to remake themselves into viable competitors to Emeryville's hardball retailers, many are watching closely as smaller furniture stores position themselves against the big blue box.

At least from the perspective of convenience, the little guys would seem to have a leg up. IKEA could be a study in how much abuse customers are willing to take (apparently, if they can get a bookcase for under fifty bucks, a lot). "The whole idea of the way an IKEA store is planned," says Michael O'Rourke, IKEA East Bay's store manager, "is to create an outing for visitors so they're really spending quality time with us." Quantity time, too. The company is working to address its parking problems with a new $12 million, 1,000-space, four-story parking garage, but that won't be completed until this fall. So for now, when drivers aren't vainly scanning the rows of cars, they can rest their eyes on the scenery. Overpasses and bridges tower over the parking lot -- one of IKEA's strictest requirements is that all stores be located directly off a major freeway, and IKEA East Bay looks out across the Eastshore Freeway, with the Bay Bridge visible in the distance. Next door, construction crews are breaking ground on something called "Bay Street" -- Emeryville's latest mixed-use development, which includes upscale townhomes and condos with 450,000 square feet of retail space and a movie theater.

Those lucky souls who find parking make their way to the huge building's entrance. The company's advertising campaign promises "Something for Everyone," but it's clear who has heeded IKEA's marketing call. The store is filled with college students on a budget, twentysomething couples attempting to give their studio apartments a makeover, and young marrieds shepherding strollers, toddlers, and diaper bags into the great blue beyond.

The way IKEA accomplishes its promise of providing "stylish furnishings at a low price" is by selling unassembled furniture to customers who are willing to hoist boxes of furniture from pallets, coax the packages into their waiting vehicles, and then, Allen wrench in hand, bring the tables, chairs, and bedroom sets to life in the middle of their living room floors. It is a testament to IKEA's marketing acumen that it has managed to create a willing spirit in a customer base whose idea of manual labor might extend no further than a visit to the gym three times a week.

"A part of the process here is to try to create a mechanical sales system that allows the customer to do a lot of the job themselves when they're in the store," O'Rourke explains as he shows me around the store in the quiet hour before the doors open to the teeming masses. We meet at the "coworkers" entrance (the term IKEA uses to refer to its employees). All coworkers, including O'Rourke himself, wear the same casual uniform: a light-blue polo shirt with the IKEA emblem stitched across the right breast, tucked into smart navy chinos. With his curls of auburn hair, O'Rourke looks to be on the youngish side of forty, but it's hard to tell, and he generates an air of being fit and well-rested as he confidently strides through the different departments of his giant store, describing IKEA's self-service strategy. To keep prices low, IKEA relies on a motivated customer. Product information is conveyed on lengthy price tags in a "frequently asked questions" format. This allows the company to cut down on the number of employees actually on the selling floor at any one time. Even so, IKEA East Bay employs over 500 people, including 68 managers. The largest cohort mans the cash registers -- one giant row of them with conveyor belts and gates and large spaces through which customers can hurry along the purchasing process by bagging their own items.

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